Why China Banned Bitcoin Transactions?

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Friday 15 Sep 2017, 11:52 WIB
Why China Banned Bitcoin Transactions?
Angga Aliya ZRF - detikFinance
Why China Banned Bitcoin Transactions?
Photo: Infographic Team, Mindra Purnomo
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Beijing - One of the popular virtual money alias cryptocurrency, Bitcoin, is experiencing a decline in exchange rates. Chinese policy is the reason.

The Chinese government issued a policy prohibiting the transaction of initial coin offerings (ICO). The ban was issued not without reason.

As quoted from Reuters on Friday (15/09/2017), there are several reasons Bamboo Curtain country banned Bitcoin transactions.

Virtual currencies are hard to control
Bitcoin exchange rate up and down purely following the market mechanism. The government can not control the exchange rate, unlike the yuan against the US dollar. The government does not like something that can not be arranged.

Easy to use for fraud
For some people who understand the movement of Bitcoin, it could be a profitable investment. But for those who do not understand can be bandwagon and entrust the money to buy Bitcoin through any place so that there can be fraud.

Destroying the investment world
Bitcoin is potentially bubble and breaks after a lot of popularity and more people want to have. Evidenced by its value that skyrocketed from Rp 10 million to Rp 60 million in just 8 months. When the bubble bursts and the price falls, the investor will be harmed.

China is the center of virtual currency transactions
Two of the world's largest Bitcoin markets exist in China. Imagine how much damage China suffered when bubble and break.

China wants to make its own virtual money
It is not impossible that China wants to create its own cryptocurrency that can be government legality. During this time many things are banned in China, in the end they make their own.

Used illegal transactions
Bitcoin transactions are difficult to trace. It is used by irresponsible parties for money laundering, drug sales, smuggling, and other illegal activities.